Why BNPL May Be Better Than Using a Credit Card

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Do you remember shopping at your local kirana store with your parents or grandparents as a child? After grabbing all the groceries they needed, they would often say, “Khaata main likhna (add it to my tab),”  and leave without paying anything. This is because the shopkeeper had a trust-based relationship with loyal customers where the total dues would get paid in one go at the end of the month.

The concept of maintaining a running account system, or Khaata as it is known in India, is as old as time itself. Just like your family members used the Khaata system, people world-over did the same. And the Khaata continues even today. The Buy Now Pay Later (BNPL) is the digital Khaata on the Internet for the digital-first natives.

Credit cards have been a popular payment option for people, especially when buying big-ticket items. But credit cards aren’t for everybody given the high-interest rates and miscellaneous charges levied on users. BNPL is increasingly getting to be a more popular payment option. Here are reasons why people opt for BNPL over credit cards.

  1. Stress-Free Eligibility 

Many Indians, much like 24-year-old Raju who recently started his first job, apply for a credit card in order to improve their credit score. But Raju’s bank doesn’t allow him to avail of a credit card at this point in time. This is due to the strict eligibility criteria that need to be fulfilled, such as income, credit history and credit score. With BNPL, Raju and numerous other Indians, no longer have to worry about meeting those stringent criteria. 

BNPL providers have relaxed eligibility criteria that most commonly include being a citizen of India above the age of 18 and possessing a bank account. This is because the spending limit is based on your spending behaviour. BNPL is particularly helpful for individuals who have no credit history.


  1. It is Completely Free

Numerous credit card users have had at least one bad experience in the past with the high-interest fees. Add to that, credit cards often have a joining fee and/or an annual fee. BNPL, on the other hand, is completely free of cost. The majority of BNPL providers, such as Simpl, are interest-free and charge no usage fee either. The only payment you must make is the outstanding bill amount at the end of the payment period. Only if you fail to make a timely repayment will you be charged with a minuscule penalty. 


  1. Easy to Use

BNPL is one of the few payment systems that offer customers convenience. You no longer have to switch between numerous apps or payment gateways. You can purchase anything you need from BNPL merchant partners with a single tap and don’t have to worry about providing OTPs. The great news: there is no or near-zero transaction failure.

Multiple transactions from different merchant platforms are then accumulated into one bill, and this can be paid at one go – fortnightly or monthly – depending on the BNPL service that you use.

And the best part? If you have to return something or cancel your order, there is no delay in processing refunds!


  1.  Consumer Empowerment

Consumers are now looking for simple solutions for their everyday needs. They feel empowered by the idea of having it all now. Having access to micro-credit without the pressure of hidden charges or maintenance fees makes their shopping experience convenient, simple and, above all, easy.

Numerous BNPL platforms also allow users to split payments into equal part instalments. One such example is Simpl’s Pay-in-3 feature. It helps you make purchases from your favourite brands and repay the bill amount in 3 equal parts over 3 months.

Aside from transparency, BNPL platforms are secured with security encryptions that keep your transactions safe from cyberattacks. 


Read More: What is Simpl Pay-in-3?



Gone are the days when people had to rely on credit scores and bank criteria to avail of micro-credit. With the recent pandemic driving digital payment platforms, BNPL is rapidly becoming popular among the masses. The convenience, security and affordability provided by this payment system allow you to avoid the hassle of multiple payments by consolidating them into one.

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